Interim Performance Presentation Second Quarter Ended 30...

STRICTLY CONFIDENTIAL

Interim Performance PresentationSecond Quarter Ended 30 June 201228 August 2012

Disclaimer

These materials have been prepared by Felda Global Ventures Holdings Berhad (“FGVH” or the “Company”) solely for informational purposes, and

are strictly confidential and may not be taken away, reproduced or redistributed to any other person. By attending this presentation, participants

agree not to remove this document from the conference room where such documents are provided without express written consent from the

Company. Participants agree further not to photograph, copy or otherwise reproduce these materials at any point of time during the presentation or

while in your possession. By attending this presentation, you are agreeing to be bound by the foregoing restrictions. Any failure to comply with

these restrictions may result in a violation of applicable laws and commencement of legal proceedings against you.

It is not the Company’s intention to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the

Company’s financial position or prospects. The information contained in these materials has not been independently verified and is subject to

verification, completion and change without notice. The information contained in these materials is current as of the date hereof and are subject to

change without notice, and its accuracy is not guaranteed. The Company is not under any obligation to update or keep current the information

contained in these materials subsequent to the date hereof. Accordingly, no representation or warranty, express or implied, is made or given by or

on behalf of the Company, or any of its directors and affiliates or any other person, as to, and no reliance should be placed for any purposes

whatsoever on, the fairness, accuracy, completeness or correctness of, or any errors or omissions in, the information contained in these materials.


2

whatsoever on, the fairness, accuracy, completeness or correctness of, or any errors or omissions in, the information contained in these materials.

Neither the Company, its directors, officers or employees nor any other person accepts any liability whatsoever for any loss howsoever arising from

any use of these materials or their contents or otherwise arising in connection therewith.

These materials contain historical information of the Company which should not be regarded as an indication of future performance or results.

These materials may also contain forward-looking statements that are, by their nature, subject to significant risks and uncertainties. These forward-

looking statements reflect the Company’s current views with respect to future events and are not a guarantee of future performance or results.

Actual results, performance or achievements of the Company may differ materially from any future results, performance or achievements expressed

or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s

present and future business strategies and the environment in which the Company will operate in the future, and must be read together with such

assumptions. Predictions, projections or forecasts of the economy or economic trends of the markets are not necessarily indicative of the future or

likely performance of the Company, and the forecast financial performance of the Company is not guaranteed. No reliance should be placed on

these forward-looking statements, if any.

Conference Call Program

5:30pm Introduction by moderator/host

5:35pm Financial Highlights by Mr Ahmad Tifli (CFO)

6:05pm Questions & Answers


3

6:35pm End of Analyst Briefing

• Over 25 years of relevant experience

• Former Head of Scomi Coach of Scomi Group and COO of Motorsports Knights (M) Sdn. Bhd.

Ahmad Tifli Dato’ Hj Mohd Talha Chief Financial Officer

• 42 years of experience in the agriculture industry

• Former Chairman of Malaysian Palm Oil Board

Dato’ Sabri AhmadGroup President and Chief Executive Officer

• 22 years of experience in treasury, investment, corporate finance, strategy and business planning

• Former Deputy Group Chief Executive Officer of FGVH

Dr. Suzana Idayu Wati OsmanChief Strategy Officer

Management Team


• Over 25 years of experience in the agriculture industry

• Former Head of Plantations (Africa) in Sime Darby Plantations Sdn. Bhd.

Fairuz IsmailHead of Global Plantations

• 38 years of relevant experience with MSM

• Current CEO of MSM Holdings

Chua Say SinHead of Sugar Business

• Over 30 years of relevant experience

• Former Chairman and Director of Pamol Plantations

Martin RushworthHead of Downstream Business

Bhd.Executive Officer of FGVH

4


1. Financial Highlights21. Financial Highlights2

5

FGV Group Financial Highlights for period ended 30 June 2012

2Q 2012 vs 1Q 2012 (RM million)

1 Quarter

20122 Quarter

2012

Revenue

Remarks

QoQ

%

Increase in CPO sales volumes3,536.4 1,720.0

>100%

6

Profit Before Tax

Profit After Tax


Higher FFB production due to improved weather conditions in 2Q

Thin margin due to low CPO margins off-set by increase in FFB production. Include one-off expenses related to IPO (RM40.4 mil)

301.5 280.8

220.2 223.21%

7%

FGV Group Financial Highlights for period ended 30 June

1H 2012 Vs 1H 2011: 6 months ended 30 June (RM million)

Actual

1H 2011Actual

1H 2012

Revenue

Remarks

YoY

%

Due to commencement of CPO sales

• Due to change in

5,256.4 3,699.942%

7

Profit Before Tax

Profit After Tax


• Due to change in business model in 2012

• High CPO purchase cost resulting in low CPO margins

• Due to change in business model in 2012

• ¹Lower FFB & CPO production due to declining yields & OER

¹Consistent with industry average due to adverse weather conditions in most period of 1H2012

582.3 951.939%

443.4 649.632%

FGV

PT Citra Niaga

Segmental Structure & Financial Results

*FGV

DownstreamFGV

SugarFHB Tradewinds

FGV Plantations

Malaysia

FGV

Kalimantan

FGV North

America

FGV US

LLC

TRT

Holdings

Felda Plantations

Felda Agriculture

Felda Palm Industries

100%

100%

95%

100%

KGFP

MSM

100%100%

100%

100%

100%

100%

100%

100%

100%

49% 20%

11%

40%

51%

77%

72%

83%

Associate Companies

*FGV

Plantations

MSM

Holdings

Delima Oil Products

Felda Kernel

Felda Farm Products

Manufacturing, Logistics & Others (MLO)

PT Citra Niaga Holdings

TRT US TRT Holdings

ETGO

TRT ETGO

Inc

Bunge ETGO G.P. Inc

Bunge ETGO L.P.

FPG

Felda Rubber Industries

Felda Technoplant

MCM

Felda JohoreBulkers

Felda Transport

*Other Businesses

100%

100% 100%

100%

100%

49% 49%

50%

71%

73%

51%

83%

67%

51%

Felda Kernel Products

Felda Vegetable Oil Products

Felda Marketing

Other Businesses

*1H 2012Rev: RM3.9 bilPBT: RM295 mil

*1H 2012Rev: RM413 milPBT: (RM5 mil)

1H 2012Rev: RM1.1 bilPBT: RM166 mil

*1H 2012Rev: RM1.7 bilPBT: RM189 mil

*Note: Segmental results excludes jointly-controlled entities (Trurich & FISB) *Note: Include portfolio investment results 8

2,881

977

3,858

1,718

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Plantation Segment

+185% +119%

Year-on-Year (YoY):Revenue Comparative Analysis

Quarter-on-Quarter (QoQ): Revenue Comparative Analysis RM in mil

2,788

3,765

-

500

2Q 2012 1Q 2012 1H 2012 1H 2011

� The significant increases in both QoQ & YoY revenue were attributed to the commencement ofCPO business in March 2012.

� Exponential increase in 2Q 2012 revenue was due to the full 3-month impact of CPO salesrecorded for the month of April to June 2012 comparatively to just the 1 month of CPO salesrecorded in 1Q 2012.

� CPO sales of RM3.8 billion accounts for 45% of FGV Group’s revenue where approximately660,000 MT have been sold in 1H 2012.

9

140 155

295

1,015

200

400

600

800

1,000

1,200

Plantation Segment (cont’d)

RM in mil

-10%

Year-on-Year (YoY):PBT Comparative Analysis

Quarter-on-Quarter (QoQ): PBT Comparative Analysis

YoY comparatives are not meaningful due to

FGV’s change in business model in 2012

-

2Q 2012 1Q 2012 1H 2012 1H 2011

10% drop in QoQ PBT was analysed as follows:

� Declining CPO prices in 2Q where monthlyaverage price in June 2012 (RM2,956/MT) havedeclined by 7% against monthly average 1Q price(RM3,190/MT).

� Impact of the declining prices were off-set byincreased in FFB production in 2Q as weatherimproved for harvesting. FFB production increasedby 9% QoQ.

YoY PBT decreased due to:

� 1H 2012 FFB production declined by 4.5%(YoY 2Q 2012: 2.31 mil MT; YoY 2Q 2011: 2.42mil MT).

� 1H 2012 OER was marginally lower by 0.11%resulting in a decrease in 1H 2012 CPOproduction by 5.4% (YoY 2Q 2012: 1.38 milMT; YoY 2Q 2011: 1.46 mil MT)

10

(2.0)(3.0)

(5.0)

(8)

(6)

(4)

(2)

-

1Q 2012 2Q 2012 1H 2011 1H 2012

Downstream Segment

Downstream Division’s improved performance in 1H 2012 were mainly attributed to the following:

TRT US: Oleochemicals

� Plant is currently operating at near capacity, increasing production.

� YoY material margins from fatty acid business have also improved by 17%.

� YoY increase of 4% in fatty acid sales volume following higher demand of CNO and tallow-based products by Unilever, launching of new

RM in mil

Downstream Segment: PBT Comparative Analysis

YoY

(19.0)(20)

(18)

(16)

(14)

(12)

(10)

based products by Unilever, launching of new detergent products by P&G and increased demand from Merchant Markets.

TRT ETGO: Canola & Soybean Crushing

� TRT ETGO recorded an increase of 11% for its YoY crush volumes.

� The plant’s improved crush rate was attributed to the plant being capable of operating 3 expellers concurrently, achieving an average crush rate of 2,400 MT/day.

� 1H 2012 share of profit in joint venture company, Bunge ETGO was RM10.09 million


YoY Growth+74%

11

546 532

1,078 1,066

400

600

800

1,000

1,200

Sugar Segment

RM in mil

Year-on-Year (YoY):Revenue Comparative Analysis

Quarter-on-Quarter (QoQ): Revenue Comparative Analysis

+3%

+1%

-

200

2Q 2012 1Q 2012 1H 2012 1H 2011

� Revenue increased by 3% QoQ & 1% YoY due to:

� QoQ increase in export sugar sales which commands an average price premium of 2% over domestic sugar prices (capped at RM2.30/kg)

� YoY increase in sugar subsidy by RM140/MT (35%) from RM400/MT in 2011 to RM540/MT in 2012.

STRICTLY CONFIDENTIAL12

81 85

166

197

50

100

150

200

250

Sugar Segment (cont’d)

RM in mil

Year-on Year (YoY): PBT Comparative Analysis

-16%


-5%

-

50

2Q 2012 1Q 2012 1H 2012 1H 2011

� Declining PBT results (Dropped by 5% QoQ ; Dropped by 17% YoY ) were mainly due to:

� Lower gross margin of 20% (2011:24%) caused by escalating raw sugar cost and higher processing cost (up by 13% in 2012).

� Costlier raw sugar prices were mainly due to new prices agreed on the long-term supply contract with the Government (2012: RM1,842/MT; 2011: RM1,564/MT)

� Lower domestic sales volume by 4% due to competition from supply of imported sugar as industry players were granted import permits.


194

88

282 307

100

150

200

250

300

350

Manufacturing, Logistics & Others (MLO): FHB Group Financial Highlight for period ended 30 June 2012

RM in mil

+15%

-38%


Year-on-Year (YoY): PBT Comparative Analysis

101

189

-

50

100

2Q 2012 1Q 2012 1H 2012 1H 2011

14STRICTLY CONFIDENTIAL

� Financial impact of FGVPM & FPI integration to FHB‘s results is reflected in 2Q 2012, through theincrease in PBT by 15% QoQ . The FGVPM & FPI integration process commenced in March 2012.

� Improved QoQ PBT were mainly due to:� Higher compound fertilizer margin (2012: RM225/MT; 2011: RM109/mt)� Increase in throughput volume for bulking operations (FJB)

Financial Performance Outlook for 2nd Half 2012

External factorsExternal factors

• CPO price is currently at RM 3,030 per MT and expected to recover due the

drought in US that has hit soybean crop, the prospective El Nino and

recovery in petroleum prices.

• Refining segment will continue to pose challenges but the negative margin

is expected to moderate due to the retaliatory change of India’s import tax

on palm olein which will encourage imports of CPO and help refining

margins

1

margins

Initiatives to improve resultInitiatives to improve result

• Continuous productivity and efficiency improvement in plantation through

Global Strategic Blueprint initiatives

• Improving efficiency and tightening cost management in plantation and

downstream business

• Restructuring of non-performing asset and divestment of non-core business

• Secure value added M&A deals

2


Questions & AnswersQuestions & Answers

Contact Us

For further information, please contact:

FELDA GLOBAL VENTURES HOLDINGS BERHADLevel 6, Balai FELDA

Jalan Gurney 1

54000 Kuala Lumpur MALAYSIA


54000 Kuala Lumpur MALAYSIA

Telephone: +603 – 2692 8355

Fax: +603 – 2692 8385

http://www.feldaglobal.com

Investor Relations contact person:Ms Zaida Alia Shaari

([email protected])

Interim Performance Presentation Second Quarter Ended 30...

Documents

Transcript of Interim Performance Presentation Second Quarter Ended 30...